South Korea's Samsung shares hit a record high on Thursday. So far this year, Samsung's share price has risen nearly 30%, closing at 1.64 million won per share on Thursday, and Samsung's market value reached 232 trillion won (about 210 billion US dollars).
CNBC analyzed the reasons why investors are optimistic about Samsung again:
1. Smartphone business revival
In 2014, Samsung’s share of the smartphone market began to decline and faced fierce competition from Apple and Chinese brands. Samsung’s flagship phone, the Galaxy S5, was also hit by a cold reception.
However, the Galaxy S6 and Galaxy S6 Edge, released in February 2015, have made the Samsung smartphone business start to improve. The release of flagship phones such as Galaxy S7, Galaxy S7 Edge and Note 7 continues to drive this process, gradually pushing Samsung to the position of challenging Apple.
Under this trend, in the second quarter of fiscal 2016, operating profit of Samsung IT and mobile communications divisions, in which smartphone sales accounted for a large proportion, increased by 56% year-on-year.
Samsung said consumers are interested in the tablet phone Note 7 released in early August, which is more than the Galaxy S7 and Galaxy S7 Edge. When it begins shipping next month, Samsung intends to limit the number of pre-sales to meet consumer demand.
2. Strong parts business
Although the smartphone is still Samsung's biggest business, the company also manufactures mobile phone parts and TV panels.
Samsung has been investing heavily in its semiconductor division to supply parts to a number of companies, including Apple. In addition, Samsung also produces organic light-emitting diode (OLED) displays for televisions. In the second quarter of fiscal 2016, Samsung Semiconductor's business sales increased by 6% year-on-year.
Daniel Kim, a securities analyst at the US consulting firm Macquarie Research Group, said: "Samsung has become an industry leader in the field of plastic OLEDs. Other companies are catching up with Samsung in this emerging field, but obviously, Samsung has no way. Beyond technology. This is why the market is optimistic about Samsung's prospects."
3. Group restructuring
Samsung has attracted a lot of criticism for its complex ownership structure. Since the restructuring in 2014, the company's ownership structure has become more transparent.
Samsung Life Insurance announced on Thursday that it has acquired 8% stake in two affiliates, Samsung Fire and Marine Insurance Co, in Samsung SecuriTIes, for which it will pay 234 billion won. .
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